MR. CROWLEY: A healthy crowd for a summer Friday afternoon. Welcome to your Department of State, home of diplomats and development experts who believe in summits, constructive dialogue, and both international and domestic beverages. (Laughter.)

QUESTION: (Inaudible) Italian espresso? (Laughter.)

MR. CROWLEY: Obviously, it is a busy day today for Secretary Clinton. As you saw, she met this morning with her counterpart from Switzerland, Federal Councilor Micheline Calmy-Rey. As you noted, they reflected on the tentative agreement that was reached in court this morning. But in their bilateral meeting, they talked about a number of issues – Iran, obviously. Switzerland is the protecting power for the United States in that country. They talked about the current dialogue between Turkey and Armenia, and they talked about the peace process. But the Secretary reflected on the great respect that we have for Switzerland and --

QUESTION: Which peace process?

MR. CROWLEY: The Mideast peace process. The Secretary reflected on the great respect that Americans have for Switzerland and the important role that it plays in a variety of mediation efforts around the world.

As we speak, the Secretary is meeting with Prince Saud al-Faisal, her counterpart from Saudi Arabia, and you’ll have the opportunity in about 45 minutes to ask questions of each of them. But I expect that during the meeting, obviously, the Middle East peace process will come up, I’m sure that Iran will come, and other issues in the bilateral relationship between the United States and Saudi Arabia.

And this evening, the Secretary will meet with President Arroyo of the Philippines, following up on a meeting that she had with President Obama yesterday. Clearly, the Philippines is one of the closest allies and partners that we have in the Asia Pacific region. But I’m sure that among the issues that will come up is various regional issues, counterterrorism, joint counterterrorism efforts. I wouldn't be surprised if Burma comes up in that meeting.

But what that, I’ll answer your questions.

QUESTION: Yesterday, on the Hill, the special envoy for Sudan said that there was no evidence to support the designation of Sudan as a state sponsor of terrorism, said that sanctions were hurting his ability to do his job and they weren’t effective. And I’m wondering, since the building didn’t have a reaction to this yesterday, I’m wondering what the reaction is today.

MR. CROWLEY: There is a comprehensive policy review that is going on regarding Sudan. Obviously, there are a number of issues attached to that. Obviously, the situation in Darfur is critically important, as is implementation of the Comprehensive North-South Peace Agreement, the resolution of which will fundamentally affect the future of Sudan. We have a number of bilateral issues with Sudan – obviously, terrorism being a crucial one. We have received improved counterterrorism cooperation with Sudan in recent years. So that process is ongoing, and I would expect it to be completed in the coming weeks.

QUESTION: Well, here’s the – let me rephrase it then. Does the Administration agree with General Gration’s assessment?

MR. CROWLEY: Assessment?

QUESTION: Of – that the sanctions – that Sudan is not – that there’s no evidence that Sudan is a state sponsor of terrorism, as it is designated; that the sanctions are hurting his ability – his --

MR. CROWLEY: Okay. Well, on that issue, obviously, as we speak, Sudan is on the state sponsor of terrorism list. It was put on the state sponsor of terrorism list for a very good reason. There is a legal process that you have to go through, set legal criteria if there’s a decision to remove a country, any country, from a state sponsor of terrorism list. But I would just say that all issues attached to Sudan are part of this review, and this review is ongoing.

QUESTION: I’m still not getting the answer to my question. Does the Administration agree with what General Gration said yesterday on the Hill?

MR. CROWLEY: On what subject? I --

QUESTION: On what I just asked you about.

MR. CROWLEY: All right.

QUESTION: I mean --

MR. CROWLEY: This is harder than – let’s face it, this is --

QUESTION: He also said that it was a political decision to keep them on.

MR. CROWLEY: On the issue of whether Sudan is a state sponsor of terrorism, it’s on our list, it remains on our list. There’s a set process in law and – but where we have been with Sudan, where we are with Sudan, where we want to go with Sudan is all incorporated into this review. And it is ongoing, and we expect this review to be completed. At that point, I think the President, the Secretary will lay out where we’re going to go with Sudan going forward.

QUESTION: I’m sorry, I’m obviously dense because I don’t think you’re answering my question. I mean, I don’t see how you think that that’s an answer to the question.

MR. CROWLEY: Well --

QUESTION: Does the Administration agree with the remarks that General Gration made yesterday on the Hill?

MR. CROWLEY: Well, I mean, it was a detailed --

QUESTION: Or is he on his own?

MR. CROWLEY: I mean, what I’m having trouble with is, it was a very detailed testimony. It touched on a number of subjects in the relationship.

QUESTION: But I’m specifically asking you about the state sponsor of terrorism – him saying it’s a political decision to keep them on, him saying that there’s no evidence --

MR. CROWLEY: Well, all I can say is today, Sudan remains on the state sponsor of terrorism list. It was put there for very good reason. And there is a process that the government goes through if it – as it – I mean, we evaluate this all the time. We’re always evaluating a variety of countries in terms of the issue of terrorism.

QUESTION: I understand that. That’s fair.

MR. CROWLEY: And this is part of the ongoing review that is currently underway.

QUESTION: Well, what is part of the ongoing review?

QUESTION: Taking them off the list is part of the --

MR. CROWLEY: Yeah, we’re going – I mean, I can only repeat what I just said. There are a wide range of --

QUESTION: I am trying to get you to answer a specific question about whether General Gration is speaking for the Administration, or if he’s out on his own freelancing when he says things like that, as – particularly that it’s a political decision to keep them on the list, that there’s no evidence, and that the sanctions are hurting the ability – his ability to do his job.

MR. CROWLEY: Well, actually, there is a legal process that you have to go through.

QUESTION: I’m not interested in the process. I’m interested in you – the Administration’s response to his testimony.

MR. CROWLEY: I’m giving you the Administration’s response to his testimony, which is: Today, Sudan is on the state sponsor of terrorism list for a good reason, and today, there is no change to their --

QUESTION: So there’s a disagreement?

QUESTION: Where --

MR. CROWLEY: Go ahead.

QUESTION: Just to follow up, just to be specific, is this – is taking them off the state sponsors of terrorism list under part of the review? Is this what you’re looking at in great detail, number one? Number two, where do you stand on the genocide issue? Do you think genocide is taking place or not taking place?

MR. CROWLEY: On that second point, the President has said that genocide has taken place in Darfur. But as General Gration himself said yesterday, our focus is not on definitions. Our focus is right now on the dire situation that we see with the people of Darfur.

QUESTION: But why is your focus not on definitions? I mean, if genocide is taking place, that unleashes a whole gamut of responses. So what you’re saying is if the genocide has taken place – but you’re not sure whether it’s still taking place because you’re – this is all under review and you’re still thinking about it?

MR. CROWLEY: Well, what’s important here – I mean, in any kind of evaluation – and we’re going through an evaluation right now – we take stock of what has happened, we take stock of what is happening. And most important, we look forward – there are a number of critical relation – critical issues inherent in the relationship between the United States and Sudan.

The situation in Darfur is of critical importance and has been for some time. The future of the country hinges on implementation of the comprehensive peace agreement and the decision that will be made in the south in 2011 regarding its independence. This is – this relationship is not about any one thing. It’s about many, many things. Terrorism is a concern to us because of actions that Sudan has taken in the past, which is why – but as we are looking at our bilateral relationship and the other issues attached to that, we are reviewing all of these aspects, where Sudan stands in terms of combating terrorism. And our evaluation of that obviously can have an impact in future decisions.

QUESTION: So in other words, labeling what is happening as genocide would have an impact on how you move ahead with the North-South agreement, and that could jeopardize your chances of getting the government to really move ahead on the North-South agreement? Am I understanding this correctly? That’s why you have this linguistic problem?

MR. CROWLEY: As General Gration said yesterday, his focus is on the current situation in Sudan, the plight of the people of Sudan, which includes the plight of the people in Darfur, and what we can do – what the international community can do, and what the Government of Sudan must do to improve their situation.

QUESTION: But some people think that what you’re doing is you’re playing down the situation so that you can keep Khartoum happy so that you can get concessions from them in other areas, and that this is making the situation on the ground even worse, and that it’s – could be comparable, if this – to, you know, what happened, for example, in Rwanda-Burundi, for example, where the administration – the Clinton Administration took a very, very, very long time to label something as genocide and, in fact, didn’t act. So those kinds of accusations are going to, I would suspect, be thrown at you, as a top State --

MR. CROWLEY: Well, no. I would – again, let me go back and repeat what the President has said. The President has said that what occurred in Darfur – what has taken place in Darfur has been genocide, and we remain deeply concerned about that.

QUESTION: Let me just ask, again, the question: Is the Administration seriously looking at taking Sudan off the terrorism list as part of its review? I didn’t hear an answer to that.

MR. CROWLEY: It’s safe to say that we are currently reviewing all issues related to our relationship with Sudan and – as point one. Point two is that we are always looking at all countries in the world and making judgments on a continuing basis, based on intelligence, of what countries are – may be guilty of aiding and abetting acts of terrorism. And so on a continuing basis we’re not only evaluating countries that perhaps should be put on that list, we also on a continuing basis review countries that are on the list and where their performance has changed in any way. And Sudan is no different than what we do for all of the countries on that list on a continuing basis.

Yes.

QUESTION: Will you take the special envoy comments into consideration during this review?

MR. CROWLEY: I’m sorry. Try again?

QUESTION: Would you take the special envoy’s comments yesterday into consideration during this review?

MR. CROWLEY: Well, clearly, in a comprehensive, government-wide policy review, the special envoy for Sudan will play a critical role in that policy review. And then once the President makes specific decisions along with the Secretary of State, implementation of whatever policy is decided.

Yes.

QUESTION: Back to North Korea --

QUESTION: No, no, no. Can we – I need to stay on this. I’m sorry. I still am looking for an answer to my – is there any daylight between General Gration’s comments and the Administration’s thinking?

MR. CROWLEY: General Gration is the special envoy for Sudan.

QUESTION: Is he speaking for the Administration, or is he speaking on his own?

MR. CROWLEY: General Gration is a member in good standing with the Administration.

QUESTION: And he, in those comments yesterday, reflected the Administration’s current thinking on the situation in Sudan?

MR. CROWLEY: Well, again, and my caveat, Matt, is that there is a – General Gration spoke about issues that are a subject of the policy review, a review that is ongoing. So --

QUESTION: But the Administration’s current thinking is at odds with what he said.

MR. CROWLEY: Well, I would say that --

QUESTION: Is that correct?

MR. CROWLEY: -- it is safe to say on an issue as large and complex as Sudan, you may infer that different agencies, different individuals may agree broadly on many things, and may have differences of view on certain elements. In the Obama Administration, there is a very healthy interagency process. There are genuine debates that go on all the time within the Administration about very difficult and very challenging information.

The President has created an atmosphere that encourages debate. And in debate about complex issues, it is not unusual that different individuals and different agencies may come at an issue with different perspectives. That all is part of a valid and effective review process. Sudan is no different. I think you’ll have – you’ve reported similar issues when it comes to North Korea, Iran, other things.

There is a policy review going on. I’m sure within that policy review, certain elements of that are being debated, and it may well be that different individuals have different perspectives. But the policy review is ongoing. The President has not yet made final decisions on what we’re going to do with respect to Sudan. General Gration has been traveling extensively in the region, has had extensive consultations with the Government of Sudan and other governments that are focused on Sudan as well, and brings that perspective back to Washington, and that perspective informs what he says on the Hill and what he says to the President and what he says to the Secretary of State.

QUESTION: Okay. So in other words, what you’ve just said is that he is not speaking for the Administration. This is his own personal view.

MR. CROWLEY: Well, no, what I’m saying is General Gration is the special envoy for the Administration for Sudan, and he brings an important perspective to the ongoing debate about –

QUESTION: But he was talking about --

MR. CROWLEY: -- what we should do in the future with and about Sudan.

QUESTION: So his testimony then was his own perspective and not Administration policy?

MR. CROWLEY: I’ll try it again, which is there is an ongoing review. General Gration is part of that review. I think what you heard on the Hill was his current perspective on the current situation.

QUESTION: All right.

MR. CROWLEY: Whether that may or may not end up being exactly what the President and Secretary of State decide in terms of our policy approach to Sudan.

QUESTION: Okay.

QUESTION: What --

QUESTION: It’s crystal clear now. (Laughter.)

QUESTION: What about the North Korea? Does U.S. have any intention to list North Korea as a terrorist country again?

MR. CROWLEY: There is a – as I just said, there is a – we are always reviewing and evaluating countries of concern and their performance when it comes to terrorism. North Korea has been on the terrorism list in the past. It is currently not on the terrorism list, and there is a legal process that is required in statute whether you take a country off or when you put a country on. And as we’ve said, we continue to evaluate North Korea in light of its provocative acts.

QUESTION: Following on North Korea, P.J., can you give us any more clarity on whether the Administration would consider that invitation that the Japanese Mainichi Shimbun reported had been given to Bosworth and Sung Kim to come to Pyongyang to discuss the journalists?

MR. CROWLEY: I don’t know that I accept the premise of your question, but obviously, we have indicated a willingness to engage on North Korea if it comes back to the Six-Party process and ceases its provocative actions and --

QUESTION: No, this was different. Mainichi reported that – and I –you can tell us whether this is true or not. They reported that an invitation had specifically been issued by North Korea to those two gentlemen to come to Pyongyang specifically to discuss the journalists. Can you tell us if that invitation is true? And what was your reaction to the invitation, if it was?

MR. CROWLEY: I’m not sure that report is true.

Yes.

QUESTION: Can you talk – I’m Fawn Johnson from Dow Jones. I was just wondering if you could tell me about the meeting with the Swiss foreign minister this morning and any – elaborate in any detail about the forthcoming agreement between the Swiss and the United States on UBS.

MR. CROWLEY: Since the details of that potential settlement are still being negotiated, I think it would inappropriate for us to comment from here. But any other comment on that would come from the Department of Justice.

QUESTION: Was it mere coincidence that this settlement happened to be reached on the very morning that the Secretary and the Swiss foreign minister were meeting?

MR. CROWLEY: I think when the meeting was scheduled there was an understanding that it was scheduled proximate to a court hearing, and upon which a decision might be a go in one direction or the other. And clearly, whatever decision the parties reached would have an impact on the bilateral relationship between the United States and Switzerland, which meant that it was useful for the ministers to meet this morning as this court hearing was taking place so that they could compare notes regardless of what the outcome was.

QUESTION: And did they? Was this a large – a big topic of conversation? Or since the settlement has been announced already, was it just kind of something that was mentioned (inaudible)?

MR. CROWLEY: I think what the Secretary and the federal councilor said in private was largely what they said in public. They were pleased that a settlement had been reached and they reflected on the fact that details still need to be worked out, and then they quickly moved on to other subjects.

QUESTION: So it was not a major topic of conversation.

QUESTION: But is the Secretary confident that the agreement does eliminate the possibility of using Swiss Bank secrecy laws to evade U.S. taxes?

MR. CROWLEY: I’m not sure I understand the question. I’m sorry.

QUESTION: Based on the agreement so far, is the Secretary confident that the possibility of using Swiss banking laws to evade U.S. taxes has been eliminated?

MR. CROWLEY: Obviously, I think that she and the federal councilor were pleased that with the settlement and, perhaps, understandings about how to handle this issue in the future, that that would be a positive thing for both countries.

What we were facing was the prospect of a conflict between U.S. law, Swiss law, that that might in some way complicate a very strong bilateral relationship. And I think both the Secretary and the federal councilor were relieved that with this settlement it removes an issue that could have complicated our relations.

David.

QUESTION: The Hamas leader, Khaled Meshal, in Damascus had some seemingly conciliatory things to say about the United States and the peace process. And I’m wondering if that pleases the Administration.

MR. CROWLEY: I think we – the specific terms fall far short of the principles that have been outlined extensively and repeatedly by the Quartet. We will be focused on actions, not words. And the Quartet principles guide our approach to the Israeli-Palestinian peace process and anyone who wants to participate in that process. So if Mr. Meshal is prepared to renounce terror and violence, if he’s prepared to recognize Israel, if he’s prepared to accept previous agreements, including the Roadmap, then that would be a positive step.

In the intervening time, if he wants to actually take actions that can improve the situation in the Middle East, he can start by declaring a ceasefire and by releasing Gilad Shalit.

QUESTION: On another related issue, what would you say to the argument that the United States insistence on an absolute settlement freeze on the part of the Israelis has given Arab countries an excuse not to come up with the confidence-building measures that Mitchell has been seeking?

MR. CROWLEY: Well, I mean, it is fair to say that the issue of settlements has occupied the reporting on George Mitchell’s activity and our efforts to prepare the ground for resumption of negotiations. But in fact, George Mitchell, through his trip last week, which we detailed, has been impressing upon all of the parties in the Middle East what they have to do.

So is settlements a significant issue? Absolutely. Are there things that Palestinians have to do to create – to take on their responsibility to promote the peace process and return to negotiation? Absolutely.

The Secretary is currently meeting with her Saudi counterpart, and I’m sure that a message that she is passing on is the responsibility of other countries in the region to support a peace process. So there’s this perception that we’re leaning in one direction and not others. We’re leaning in all directions.

Yes.

QUESTION: Back on Tuesday --

QUESTION: Is that physically possible? (Laughter.) Some people say the Administration (inaudible).

MR. CROWLEY: We are applying equal pressure in all directions. Thank you, Matt.

Go ahead.

QUESTION: Yeah. Back on Tuesday, at the closing statements of the S&ED, the vice foreign minister of China said that in the process of the dialogue, the U.S. stated unequivocally that the Xinjiang incident was entirely a domestic Chinese issue. Can you substantiate that statement or --

MR. CROWLEY: As Secretary Clinton said in the press conference at the conclusion of the S&ED, we did raise this issue among a number of human rights concerns that we have, and that we encouraged China to resolve this issue in a transparent way and to do what it can to seek understanding and reconciliation while respecting differences within its population.

QUESTION: But did you specifically – did you specifically say what the vice foreign minister is saying, that it’s an internal Chinese issue, in addition to everything else the Secretary said?

MR. CROWLEY: Well, it is an issue within the population of China in that you have different – you have tensions within the Chinese population that has created conflict, and that conflict has led to significant deaths and injuries. But obviously, how China acts to resolve this tension is of interest to the United States and the rest of the international community.

QUESTION: But in the Chinese language and in their use of that word, “internal issue” in diplomacy, the way they use it at their podium at the foreign ministry, it has a very significant meaning. When the Chinese foreign ministry spokesman talks about this is an internal issue, he means it’s not for any other foreign country to stick their nose into and it’s for China to settle itself.

MR. CROWLEY: If that were a interpretation, I think we would disagree with that interpretation.

QUESTION: Just --

MR. CROWLEY: Yes.

QUESTION: -- on the same note, I mean, in those same comments, the minister said that he was pleased with the – I think his word was “moderate tone” that the United States has taken when commenting on this. You said that she expressed her concerns. Did she really press them on human rights in China?

MR. CROWLEY: Yes.

QUESTION: Or was – or maybe –

MR. CROWLEY: I mean --

QUESTION: Because, according to his tone, to hear his comments, she just mentioned it and then – and he was very pleased that she didn’t seem to press him on it.

MR. CROWLEY: Well, many details of what exactly happened and how this happened remain murky. That said, clearly there is continuing tension in Xinjiang in the Uighur population, Han population. We have genuine concern about the willingness of China to accept and encourage and protect the rights of all of its citizens, and that was, in that context, what the Secretary expressed to the Chinese during the meeting.

QUESTION: But she did say – or are you saying that she did not say this is an internal matter for the Chinese?

MR. CROWLEY: Well, I respect the fact that this – as the Secretary has said, we have concerns about China’s human rights performance. That has been part of our relationship going back a number of years. And we do not hesitate to tell China when we have – what we are concerned about and what we believe they need to do.

QUESTION: Right. But I guess the question is – you said the situation in Xinjiang remains murky. But what she told the vice foreign – the vice – whatever. What she told the Chinese should not be murky. And this use of the word, as Indira noted, I mean, the – this is a buzzword for the Chinese, an internal matter or an internal affair. And if she conceded – even if she only meant that obviously, this was taking place inside China, if she conceded that it was an internal affair, that means – that’s a huge step for the Chinese.

MR. CROWLEY: I wasn’t at the Chinese portion of the press conference, so I’m not in a position to parse what the vice premier[1] said. But from – all I can do is tell you, from a United States standpoint, we have – we reserve a right to comment to China. We respect China. The S&ED was about the expanding relationship, the overlapping interests that we have, the opportunities for cooperation that we have between the United States and China.

But it was a strategic and economic dialogue. In that strategic element, was human rights part of the discussion? It was an important part of the discussion. And we have and will continue to comment to China, our friends in China, when we believe that their actions are inconsistent with our values or international norms.

Yes.

QUESTION: Going back to her peace process, what kind of progress has Senator Mitchell achieved during his last trip to the Middle East? And what about the renewing of sanctions on Syria?

MR. CROWLEY: Well, obviously, the – Senator Mitchell visited Damascus on his last trip. His discussions with Damascus I think he characterized as constructive. I don’t have the precise language in front of me, but it touched on the peace process. It touched on bilateral issues. And there have been some reports – I think they might be a little bit too forward-leaning – in existing statute. There are sanctions in place with respect to commercial activity in Syria, but there are also opportunities for exceptions to those sanctions. And I can’t say the degree to which or if that was a part of the discussion.

QUESTION: There’s another event. Can we --

QUESTION: Yeah, I got one more question and then --

MR. CROWLEY: Yeah.

QUESTION: Do you have any comment on the situation in Nigeria, the detention and the ongoing violence, especially given the fact that Secretary Clinton will be there soon?

MR. CROWLEY: The Secretary will be there soon. Obviously, there have been reports of incidents, of clashes in northern Nigeria, and we are monitoring those – that situation closely. And I think what is happening in Nigeria will be a significant subject of her discussions with both the president and foreign minister of Nigeria while she’s there.

QUESTION: A quick question on Honduras?

MR. CROWLEY: Mm-hmm.

QUESTION: You’re – are you concerned about the pace of the negotiations, particularly in light of Mr. Micheletti’s comments that under no circumstances will Zelaya be allowed to take possession of the government?

MR. CROWLEY: Well, the mediation efforts of President Arias continue. I would also say there are OAS meetings going on today here in Washington regarding the current situation in Honduras. We continue to believe that the agreement, or the points that President Arias have put forward provide the best opportunity to resolve the situation. We encourage both the de facto regime and President Zelaya to accept the terms that President Arias has laid out.

Ambassador Llorens saw President Zelaya yesterday in Nicaragua for an important meeting, but at this point, President Arias has put an effective plan on the table and we continue to encourage the two sides to accept it.

QUESTION: But do you oppose Micheletti’s flat comments like these, that under no circumstances will Zelaya be allowed to return?

MR. CROWLEY: Well, at various times in the last few days, you have heard conflicting reports. Our message to Micheletti and to Zelaya are clear: President Arias has put forward an effective resolution to the crisis, and we encourage both sides to accept it.

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